There’s a lot of focus on D2C in the investment platform world at the moment. Maybe it’s the relentless approach of the sunset clause and the prospect of millions of orphan investors, or maybe it’s a growing realisation that generation Y live almost entirely online but, whatever the reason, there is a heap of development going on.
In amongst all that development is a lot of chatter about customer journeys. Wire frames, responsive UIs, calculators and widgets are all thrown into the melting pot in the search for compelling new ways to present “investing” to prospective customers. Many of the results look very nice and will no doubt score highly in focus groups and usability labs. But for all the risk sliders, doughnut graphs, fan charts and avatars, I can’t help thinking that there is something misguided about much of what’s going on.
The root of the problem, I believe, lies in old thinking about who shapes the online journey. Whilst the talk is of “customer” journeys, the approach still feels like providers designing a route to buy a product. Which probably explains why most D2C journeys I’ve seen look very much like adviser journeys…… just without the adviser!
Some of the blame can no doubt be laid at the door of the FCA and its hopelessly outdated Conduct of Business regulation, but there is also a failure to grasp some fundamental changes that are shaping the digital world.
In the early days of the Internet, suppliers rushed to build their own store-front online, and new shops sprang up every day. E-commerce flourished but the variable experience between sites could be frustrating. Then a few smart people saw the opportunity to develop online markets where consumers could buy from multiple suppliers via a single seamless service, and the likes of Amazon and eBay have never looked back.
The parallels with the investment sector are obvious. Product providers, with their long history of product-centric thinking, are each seeing their websites as the centre of the investment universe and building out from there. This was flawed enough for an adviser distribution model, but will be even more doomed for D2C where financial services ecosystems are already beginning to emerge.
The volume of business flowing through sites such as GoCompare, Confused, and ComparetheMarket is growing exponentially, and they have become a primary route to market for many suppliers. And as they expand so have the services they provide. Several have already moved beyond insurance to compare savings, ISAs and even annuities. Now they’re adding tools, calculators, magazines and forums to create fully featured finance ecosystems that will surely attract mass market consumers in the same way as Amazon.
The logic of D2C providers trying to compete with these ecosystems and contain its customers within some kind of walled garden is surely flawed. Instead providers must learn to spot new online markets as they emerge and make it simple for them to access its products and services. That means driving open communication standards, publishing and promoting APIs, supporting 3rd parties with integration and really becoming embedded in the networked Financial Services world of the future.
Soon it will be the customer who designs the journey, not providers.
